Govt to release new indices for IIP, WPI from April-end

New Delhi, March 6 -- The government will release a new series of indices to measure two key economic variables, factory output and wholesale prices.
The new series to be released by end-April will have a new base year of 2011-12-like it is for the Gross Domestic Product-for the Index of Industrial Production (IIP) and Wholesale Price Index (WPI). Not only will the new series improve the accuracy of the data, it will also make it comparable to GDP; in addition by bringing up the base year the data is a better reflection of the contemporary economy.
"The first release will be April-end. The February data for IIP with the revised base will be available in April end as there is a lag of around one and a half months in collation of data. After that, we will stick to the 12th day of every month from May onwards. In this regard, a meeting of secretaries headed by the cabinet secretary will be held on 14 March," said G.C. Manna, director general Central Statistics Office (CSO), on the sidelines of a workshop.
Manna further disclosed that the states will be generating their own sub-state consumer price inflation (CPI) indices to provide more accurate region wise measure of retail inflation.
At present, the data released by the ministry of statistics and program implementation (MOSPI) for IIP and WPI are computed on a base year of 2004-05, which makes the comparison with the GDP data difficult. Madan Sabnavis, chief economist at Care Ratings, welcomed the proposed change in base year. "All the indices for the country should have same base years and these indices should be changed periodically, may be every five years or so, as they are important to capture the dynamic conditions of the overall economy which keeps changing over time," he said.
"At present, we can't really compare WPI and CPI. This is not only because their composition of goods is different but more importantly their base years are very much different by nearly 20 years or so (1995 to 2012). Similarly, when one looks at the IIP and GDP numbers, the IIP numbers are showing negative growth for the manufacturing sector in 2016-2017 but the GDP numbers are showing 7.5% growth in manufacturing. So how can there be this kind of anomaly?," he added.
IIP denotes the growth of the various sectors of the economy including mining, electricity and manufacturing; WPI is the price representative of basket of wholesale goods; and CPI measures the changes in the price level of a "market basket" of consumer goods and services purchased by households and has replaced WPI as the main measure of inflation. Manna said the ministry is closely working with states to provide sub-state Consumer Price Index.
"These sub-state level estimates will be more robust as they would be based on a wider set of sample. But this will not be used as an input for calculation of the national level rural, urban and combined CPI inflation numbers as they would be based on separate samples," Manna added. Pronab Sen, former chairman of the National Statistical Commission, however highlighted the practical difficulty of estimating the sub-state indices. "Though these estimates are desirable to estimate the price differences between the states but we don't know whether this will be feasible or not as we don't have enough manpower to do this."